Coffee Beanery Franchisees Uncover New Evidence

Claim "Evidence Deliberately Withheld" in Pepsi Contract

ANN ARBOR (Blue MauMau)  - In a Submission of New Material Evidence filed yesterday in the U.S. District Court for Eastern District of Michigan, Coffee Beanery franchisees claim the franchisor deliberately withheld an amendment to its Pepsi-Cola agreement. Harry M. Rifkin, Cohan, West, Rifkin & Cohen, states that his clients, Richard Welshans and Deborah Williams, discovered the July 10, 2003 amendment to the existing October 1999 Pepsi contract, in which the arbitrator in their case "mysteriously and without support found was not in effect."  

The amendment reinforces that franchise-owned outlets shall exclusively purchase the Pepsi products and states The Coffee Beanery had already received $114,139 from Pepsi as an advance, listing the terms. The failure to disclose these obligations in the Uniform Franchise Offering Circular, according to Rifkin, directly violates the plain language of the Maryland Franchise Act and Investment Law. 

The amendment also confirms that the original agreement introduced into evidence by the franchisees in arbitration was valid and in full force when they bought their franchise. He states, "The willful withholding of this Amendment likely led the arbitrator to conclude that the original Pepsi Agreement was not proved to be in full force and effect," although Coffee Beanery strongly stated that it was. When franchisees had asked for documents related to vendor contracts in discovery for the arbitration, Coffee Beanery "secretly withheld" the amendment.

Rifkin, once again, asked the court to vacate the arbitration award and grant the franchisees relief as the Court deems proper.

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Previous Blue MauMau Article:

• Coffee Beanery Franchisees Fight On Despite Losses
• Maryland Launches New Probe into Coffee Beanery Violations
• Coffee Beanery Not To Sell Franchises in Illinois